Ever since the original iPhone launched back in 2007, users have been calling out for improvements to the built-in camera. The first iPhone’s lack of basic digital camera features such as no flash, no zoom or no auto-focus abilities, were all major points of frustration. However over time, as new iPhone models rolled out of Cupertino, improved camera features came also. The smartphone’s camera soon went from packing 2.0 megapixels to 3.2 megapixels, and features such as geolocation, auto-focus and video recording were all eventually added — although it wasn’t enough, and the grumbles kept on coming.

Steve Jobs’ keynote this Monday finally offered up the changes to the iPhone’s camera that have long been desired. The features introduced for the new iPhone 4 include an upgraded camera, jumping from 3.2 megapixels to 5.0 megapixels, an LED flash and the addition of a 5x digital zoom. Also joining the camera improvements is the introduction of a front-facing camera (for video-chatting) and the ability to record high-definition (HD) video.

The iPhone 4’s overdue camera flash, which is LED based, is supported by an integrated backside illuminated sensor. This has been added as a way to get more light to the camera’s flash sensor when taking pictures in low-lighting conditions.

The iPhone has been capable of recording video since the introduction of the 3GS, although the footage captured was of a relatively low quality. Today’s update fixes that and offers HD video recording on the move. The iPhone 4 can record footage at a resolution of 720p, all at 30 frames per second. Focus capabilities have also been added to video — users need only to tap on the screen to change the focus of the recording. Additionally the camera’s LED flash can also act as a light, lighting up scenes when required.

To compliment the new video capabilities, Apple also revealed a mobile version of its video editing software iMovie. iMovie for iPhone will cost $4.99 and will offer a boiled-down version of the fully fledged Mac app. The mobile application will allow users to trim footage, add geolocation data, add transitions and upload footage to either Mobile Me or YouTube. Completed clips can also be exported in one of three resolutions: 360p, 540p and 720p. Apple has not specified if the app will be available on the older 3GS.

Are you pleased with the introductions to the iPhone 4’s camera, or are there still additions you would like to see? Do you like the device’s design? Will the addition of HD video recording make you ditch your Flip Mino HD? Let us know in the comments!